4 factors are… -Land (natural resources) -Labor (skills of people) -Capital (goods used to make other goods, tools, not money) -Entrepreneurial ability (organizes and coverts other resources)
They are paid in… -Land—rent -Labor—wage -Capital—interest - Entrepreneurial ability—profit
Examplesof land would be -fish -oil -water -corn -commercial real estate
Examplesof labor would be -human capital -song writing skills -unskilled McDonald’s worker
Examplesof capital would be -auto assembly line equipment -robotic arm -tractor -factory
Examplesof entrepreneurial ability would be -Oprah Winfrey -Bill Gates -Steve Jobs -Farmer
The factors of production and their payments are illustrated in the circular flow model....
Click here to read an article about the production of oil. It connects to factors of production because there are many obstacles that an industry must overcome in order to make money off of their product. Factors such as weather affect the oil industry because the different seasons have a direct relationship with the amount of time people spend driving in their car. Thus, the demand for oil in cars changes when the seasons change. If land is not suitable for driving, then people do not want to use their cars.
Factors of Production and Their Payments
4 factors are…
-Land (natural resources)
-Labor (skills of people)
-Capital (goods used to make other goods, tools, not money)
-Entrepreneurial ability (organizes and coverts other resources)
They are paid in…
-Land—rent
-Labor—wage
-Capital—interest
- Entrepreneurial ability—profit
Examples of land would be
-fish
-oil
-water
-corn
-commercial real estate
Examples of labor would be
-human capital
-song writing skills
-unskilled McDonald’s worker
Examples of capital would be
-auto assembly line equipment
-robotic arm
-tractor
-factory
Examples of entrepreneurial ability would be
-Oprah Winfrey
-Bill Gates
-Steve Jobs
-Farmer
The factors of production and their payments are illustrated in the circular flow model....
Click here to read an article about the production of oil. It connects to factors of production because there are many obstacles that an industry must overcome in order to make money off of their product. Factors such as weather affect the oil industry because the different seasons have a direct relationship with the amount of time people spend driving in their car. Thus, the demand for oil in cars changes when the seasons change. If land is not suitable for driving, then people do not want to use their cars.